Why United’s bad business call will haunt it

The airline made a business decision: that it was more important than the customer

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13 April 2017

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Shayan Shakeel is the editor at Aviation Business

Everyone on the internet and beyond has a view on United Airline’s shocking treatment of an incapacitated–and later bloody from the mouth–passenger yesterday. But as the news cycle runs its regurgitative course, some are beginning to miss the point behind why this incident is such a big deal.

Earlier in the week on Twitter, someone had asked if safety or customer service was more important on when flying; that those picking safety should automatically be in favour having a passenger like 69-year old David Dao removed from the flight for his behaviour. Meanwhile, the largest newspaper in Dao’s home state of Kentucky, The Courier-Journal, ran a piece using the classic “the victim is no angel” defence–in a plot twist to a tangent that is as absurd as could be, controversy has ensued on whether David Thanh Duc Dao is the victim of defamation under a 'smear campaign' that has might have him being mistaken for another David Anh Duy Dao's past crimes.

The fact is, safety is every flier and airline’s number one priority. It’s possible Dao reacted in a way that many would have not–although accurately predicting how most people would react to being thrown off a plane could right now only be possible via some kind of dark art. But Dao was nobody until he was made to vacate a seat he had rightfully paid for, had boarded, and was sitting in. By all rights, he couldn’t be bothered to miss it.

The issue isn’t who Dao was or what he did. It’s what the airline did and allowed to happen. Dao might not have agreed to being bumped for even $100,000. But he wasn’t offered to vacate for even $2,000. He wasn’t offered another flight on another airline. From what’s been understood, he wasn’t given a choice other than taking it “or else”.

The rationale behind United's removal of Dao relied on using frequent flier miles and priveliged flier status' to determine which customer was least valuable on the flight. It's not the first time the airline has done it either, according to at least one other passenger who says he was threatned with handcuffs if he didn't agree to disembark in an earlier incident. As our editorial director puts it, “the fact is that the airline made a business decision: that it was more important than the customer.”

And it failed brilliantly. Two hours into trading the day after the incident, United had lost $675 million on the stock market, and its reputation was tarnished to the point where the Emirates Airlines and Royal Jordanian were trolling it on social media. Even Pakistan’s struggling PIA, which recently made news for making overbooked passengers stand in the aisles on a flight, was taking potshots at it.

United CEO Oscar Munoz took a brave, and foolish, step in choosing to “stand by” the decisions made. But the minute the airline’s employees decided to defer to the WWE style machismo of American law enforcement is when United’s crew must have realised that they had just screwed up royally.

United did realise it eventually–after over a billion dollars had been wiped off United's stock value. The company has since recovered to be down only a quarter of a billion dollars in market value–after Munoz issued a formal apology to Dao, then went on TV to make another impassioned acceptance of error on his part. “My deepest apologies for what happened…No one should ever be treated this way,” he said, adding that the airline takes “full responsibility and will work to make it right.”

It might not be enough, however. When we last heard from Dao, he had hired two lawyers, presumably to file a lawsuit. How far United will have to go “to make it right” as Munoz said in his letter, remains to be seen.